Here's the Story of the Stanford PhD Who Allegedly Gamed the Texas Lottery (and Won $20 Million)

I wrote recently about the husband and wife team out of Michigan who figured out how to game the lottery, and walked away with almost $27 million over the course of nine years.

But it turns out there’s a greater mystery in the world of lottery watchers. 

Her name is Joan Ginther, and she won the Texas Lottery at least four times in 10 years, while apparently buying thousands if not millions of dollars wroth of tickets.

Oh, did we mention she has a Stanford PhD in statistics, lives in Las Vegas, and yet repeatedly made the trip to a single store in rural Texas to make many of her purchases?

Yes, the plot thickens. And so far at least, nobody knows exactly how she did it.

There are several differences between Ginther’s lucrative story in Texas and that of Marge and Jerry Selbee in Michigan and Massachusetts.

For starters, there’s the fact that while the Selbees are now very upfront about how they made their millions, and were the subject of a very well written report recently on HuffPost, Ginther apparently went underground.

At last report, she lives in Las Vegas, but I can’t find that she’s ever given an interview. My attempts to track her down for this story amounted to nothing.

So, we’re left with reverse-engineering and speculation. 

By far the best attempt to decipher her strategy that I can find came from the work of Peter Murca, a reporter with Philly.com, who wrote about her at length in 2014.

As Murca tells the story, Ginther likely won her first jackpot in Texas the traditional way: blind, dumb luck, walking away with a $5.4 million jackpot in 1993, payable in annual installments over 20 years.

But Murca’s report suggests the experience led her to turn her Stanford training toward the goal of winning the lottery over and over.

And, after spending a considerable amount of time trying to unpack what she did, he comes to several conclusions.

First, he says, she figured out that while the lottery is ultimately a game of chance, logistics made it possible to ease the odds.

In sum, the fact that the Texas lottery had to ship thousands of scratch off cards to stores all over the state, made it possible for people who pay close attention to track how many tickets had shipped, how many prizes were left, and in which stores the likely winners might wind up.

Second, she may have had help. As Murca wrote:

Anna Morales, a worker in the local water department, filed claims for 23 prizes worth $1,000 to $10,000 in seven games from 2009 through 2012 — about as many as Ginther claimed but in half the time. Another $1,000 ticket was cashed by Morales’ husband, Noe, in 2011.

Pure coincidence seems implausible.

Since neither woman consented to be interviewed, and records don’t show who physically bought each winning ticket, let alone whose money was used, explanations for both women claiming so many winners range from generosity to imitation to teamwork.

Third, she apparently played the game of large numbers.

Meaning that over time, Murca concludes she bought a total of $3.3 million worth of tickets in order to win her total $20 million in winnings.

To be clear, that’s an amazing margin, if she figured this out. But it suggests she had figured out a statistical truth that required scale to come to fruition.

And, Murca says, she likely bit hard into her cost of goods, because many of those $3.3 million worth of lottery tickets were winners– just not for the massive multimillion dollar prizes that make headlines.

A few dollars here, a few hundred there, even a few thousand now and again–and Murca concluded the $3.3 million in tickets might have cost her only about $1 million.

To be clear, we don’t know exactly what happened.

The frustrating part about Ginther’s story is that we can’t wrap it up with a nice bow the way we can with the Selbees, or with the MIT students who also figured out how to game the Massachusetts lottery.

Ginther apparently hasn’t given interviews. (If you change your mind, Ms. Ginther, contact me!)

But I think there’s a lesson, even if it’s one I’d never put into personally with something like the lottery.

In every successful business, the founders either have unique access to private information, or else a unique application that can be executed with public information.

The question for any of us in business is: which strategy works best for you?
 

Can These Small Satellites Solve the Riddle of Internet From Space?

Satellite internet is notoriously expensive, and the business of providing it is notoriously brutal. A startup called Astranis founded by rocket scientists from Stanford University and MIT wants to change that.

The company’s satellites are about the size of a mini-fridge, while traditional satellites are closer to the size of a bus. “Traditional satellites cost hundreds of millions to build,” says co-founder and CEO John Gedmark. “These cost tens of millions.”

Gedmark says Astranis focuses on the software that controls its satellites, which make them more flexible than traditional satellites. By using software-defined radio, for example, the company can more easily change what radio frequencies a satellite uses.

Astranis is joining a new space race led by Elon Musk’s SpaceX and Richard Branson-backed OneWeb to build a new breed of satellite internet network that can reach the entire globe and perhaps compete with more traditional forms of broadband, like cable internet and cellular data services. But Astranis is taking a different approach than other space companies by focusing on bringing down costs.

Traditional satellite communications systems float in what’s called geosynchronous orbit, around 22,000 feet above the Earth. These satellites can provide internet access to remote parts of the Earth, as well as airplanes. But the connections can lag, which isn’t good for real-time applications like online gaming or video conferencing. SpaceX and OneWeb both aim to overcome this problem by launching satellites into what’s called low Earth orbit, which ranges from roughly 100 to 1,250 miles above Earth.

Astranis

The problem is that in order to reach the entire world from low Earth orbit, these companies need hundreds or thousands of satellites, raising the system’s cost. Previous attempts at building low Earth orbit networks ended in bankruptcy, including the Bill Gates-backed Teledesic and satellite-phone companies Globalstar and Iridium.

SpaceX and similar companies, like Jeff Bezos-backed Blue Origin, are trying to reduce the costs of launching rockets, which lower the cost of building such a network. But it’s not yet clear whether these companies could offer internet access at rates that subscribers can afford, and skeptics worry this will end up costing more than just trenching fiber and building cellular towers.

Astranis is sticking to geosynchronous orbit, but it’s building small, cheaper satellites that the company hopes will bring the costs for end-users into the same price range as cellular data.

That plan won’t address the latency issues of geosynchronous orbit satellites, but the company just might be able to bring affordable high-speed internet to places where laying fiber isn’t practical, such as the Pacific islands. Astranis plans to sell bandwidth to internet service providers, rather than directly to end-users. It already has one test satellite in space, and plans to launch its first commercially available satellite next year. Eventually the company could launch dozens or hundreds of satellites; other geostationary satellite communications providers operate anywhere from one to dozens of satellites. Gedmark estimates each Astranis satellite will have a bandwidth capacity of about 10 gigabits per second, which isn’t much compared with a wholesale fiber-optic link, but should be enough to help get remote areas online.

The company received a vote of confidence Thursday from venture-capital firm Andreessen Horowitz, which announced a $13.5 million investment. Andreessen Horowitz partner Martin Casado said the Astranis team was the main attraction. Gedmark has a degree in aerospace from Stanford and previously worked for the Xprize Foundation. Co-founder and CTO Ryan McLinko studied aeronautics and astronautics at MIT, designed hardware for satellite company Planet Labs, and oversaw the creation of the flight-control system for Sierra Nevada Corporation’s Dream Chaser spacecraft. Other team members previously worked for SpaceX, Orbital, and Google.

“Lots of companies understand the software or networking side, but these guys really understood the space side,” says Casado.

Sattelite companies often need billions in capital, but Gedmark wouldn’t discuss how much money Astranis will need to raise to meet the company’s goals. Gedmark says he expects each satellite the company launches to be profitable.

Astranis isn’t alone in trying to find a compromise between gigantic geostationary satellites and networks of thousands of low Earth orbit satellites. O3B, founded by Greg Wyler before he started OneWeb, places satellites between low Earth orbit and geostationary orbit. That reduces latency and cuts down on the total number of satellites needed to provide service. But Gedmark argues that by sticking to geostationary orbit, Astranis is able to reach more places with less gear. “We can send a small satellite out to geo and start making an immediate dent in this problem,” he says.

Space Race

Sheryl Sandberg Talks Facebook’s Response to ‘False News’

Sheryl Sandberg knows that Facebook is coming off a bumpy year, and that the road ahead doesn’t appear any smoother.

“To say 2017 was a challenging year feels like a bit of an understatement . . .” she said on Wednesday at a Morgan Stanley investor conference in San Francisco. “We are taking a number of steps to show that we take full responsibility for everything that happens on our platform.”

Specifically, Sandberg cited the controversy around fake news and misinformation spread on Facebook. The company has also been criticized by users and the political leaders over the fact that fake accounts linked to Russia churned out divisive posts and interacted with Americans in the lead up to the recent U.S. presidential election.

Sandberg said on Wednesday that “it will never be 100% possible” to eliminate all “bad” content from Facebook, but she said the company continues taking steps to fight “false news,” including hiring teams of third-party fact-checkers and vowing to increase the transparency and security around political ads that appear on the service.

“We are working hard and making sure all of the information on Facebook is from authentic accounts,” she said. “Because fake accounts are actually the source of a lot of the false news, and they were the source of all of the election interference we saw.”

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Sandberg added that, contrary to popular opinion, fake news on Facebook is usually more “economically motivated” than driven by politics. “People are writing outlandish headlines so they can get clicks, so they can make ad money,” she said. “So, probably the most important thing we can do is go after the economic incentive and make sure that people who are purveying fake/false news are not making money from it.”

“People want real news on Facebook, we want them to have real news on Facebook,” Sandberg continued. “So, we’re working very hard in this area.”

Appearing at the conference along with Facebook CFO David Wehner, Sandberg also took the opportunity to “answer a question that wasn’t asked” near the end of the session. Referring to the ongoing “MeToo” movement, Sandberg, the author of the book Lean In, about women in the workplace, noted that this is an “extremely important moment for women” with regard to standing up to harassment and seeking more equality in the workplace. Citing a recent survey that found male managers are now more worried about spending alone time with their female subordinates as a result of the recent uptick in harassment claims, Sandberg urged male business leaders to “make sure your firm access is equal” because “even before #MeToo, women were much less likely be mentored than men.”

“Not harassing us is important but basic,” she said. “We need more. We need an equal share of time and attention that gets women into the roles they need.”